Academic journal article Global Business and Management Research: An International Journal

Framework for Implementing Flexible Automation in Indian Industries

Academic journal article Global Business and Management Research: An International Journal

Framework for Implementing Flexible Automation in Indian Industries

Article excerpt

Introduction

Over the last twenty years, powerful developments globally as well as within the country had a considerable impact on Indian manufacturing sector. First is the substantial reduction in trade barriers across the globe and in India, particularly in respect of manufactured goods. Second is the technology revolution that is taking place impacting on productivity and lowering of costs and the third is the emergence of low cost manufacturing hubs--China and other South East Asian countries. All these meant that the Indian economy and the manufacturing sector in particular, have to necessarily adjust to these challenges. The overall contribution of manufacturing to the GDP is approximately 17% which is much below its potential (National Manufacturing Competency Council, 2006). The primary reason for inadequate growth of this sector in India is insufficient capability and capacity needed for global competitiveness.

The Small and Medium Enterprises (SMEs) form the backbone of manufacturing sector. In India, the SME Sector contributes to 40% of total manufacturing output. It is estimated that there are over 500,000 SMEs in manufacturing (MSME, 2009). While large organizations have made notable investments in setting up robust manufacturing technology infrastructure, the deployment rate of technology is considerably low among most SMEs. Given that SME's own a significant portion of India's manufacturing output, they need to be strengthened for competitiveness and sustainable growth. A survey by Agarwal(Agarwal, 2005) indicates that internationalization of competent SMEs is more of a necessity and technology capacity building is a prerequisite for their growth, competitiveness and sustainable development.

To achieve global competitiveness, National Manufacturing Competitiveness Council (NMCC) has identified following improvement areas in manufacturing capabilities of Indian SMEs (National Manufacturing Competency Council, 2006).

1. Technology infrastructure

2. Production management

3. Design / Innovation expertise

4. Quality Management

Numerous frameworks have been created worldwide to address the problem of building competitiveness in the manufacturing industry. However, most of them cater to large enterprises who can afford big investments. The problem of building capability and capacity in Indian SMEs has its unique challenges and needs.

The proliferation of Advanced Manufacturing Technologies (AMT) in Indian SMEs is very less as compared to the large manufacturing enterprises. Dangayach and Deshmukh (G.S. Dangayach, S.G. Deshmukh) have done an extensive survey on four competitive parameters ie quality, delivery, flexibility and cost. They concluded that Indian companies are giving the highest priority to quality and the least priority to flexibility, in contrast to USA and Japan where highest priority is given to the flexibility dimension. Flexibility is the competitive priority, which is realized by adoption of AMT. However, many core strategic and operational questions in the form of flexibility an organization must acquire in order for it to remain competitive in the market, and the type of technological and organizational systems needed to achieve these flexibilities still remain unanswered.

A study by Jain (Jain, 2008) finds the top six AMTs currently adopted in India are plant certification, computer aided design, local area network, quality circle, MRP/ERP, and wide area network. Clearly, four of these top six are directly in the IT area (CAD, LAN, WAN) or directly dependent on it (MRP/ERP systems), indicating a strong IT adoption rate as well as its underlying supportive role in the overall AMT adoption in India. However, tests in their survey also reinforce the hypothesis that larger companies are more likely to adopt AMT than the smaller ones and also that the adoption of advanced manufacturing technologies at the shop-floor is very low and it in turn directly affects the competitiveness of the manufacturing enterprise. …

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